Nodal is a transforming growth factor (TGF)-beta like protein that we discovered on the basis of a retroviral insertional mutation and showed to be essential for early development. Our studies on the nodal null mutation revealed a major role in gastrulation. Nodal also is expressed later in development, around the node and in the left lateral plate mesoderm. However, the early lethality of the null mutant has prevented genetic analysis of nodal function at these other times and places. Therefore we made a conditional mutant allele, using a Cre/loxP strategy. In the course of characterizing this "floxed" allele we discovered that it is hypomorphic. Embryos carrying the hypomorphic allele and a null allele progress through gastrulation but then display abnormal phenotypes at later stages. At embryonic day (E) 7.5 a subset show a mis-positioned primitive streak and node, providing evidence for an unsuspected function for nodal in the development of the anterior-posterior axis. By E8.5 three distinct mutant classes are evident, each showing anterior patterning defects of varying degrees of severity. One class also completely lacks left LPM expression of nodal. These embryos also lack normal asymmetric expression of Pitx2,lefty-1and lefty-2,and exhibit random left-right asymmetry of the heart, transpositions of the great vessels, right isomerism of the lungs, and midline or reversed stomachs. This detailed analysis has provided conclusive genetic evidence for nodal's essential role in the development of left-right handed asymmetry of the visceral organs. A second class lacks nodal expression around the node and shows severe midline defects, including fused somites. This is a novel phenotype providing the first insight into nodal's role in the midline. However, this class also lacks lateral plate expression. To confirm that it is the loss of nodal from around the node that leads to the midline defects, we are utilizing the floxed nodal mice in conjunction with transgenic mice that express Cre in this region of the embryo. One of the earliest critical functions of nodal is in the formation of mesoderm at the initiation of gastrulation. To dissect the biochemical components of nodal signaling during gastrulation, we established a cell culture model system utilizing P19 pluripotent embryonal carcinoma cells and recombinant nodal protein. We found that nodal signaling activates pAR3-Lux, a luciferase reporter previously shown to respond specifically to activin and TGF-beta. However, nodal was unable to induce pTlx2-Lux, a reporter specifically responsive to bone morphogenetic proteins. We also demonstrated that nodal induces p(CAGA)12, a reporter previously shown to be specifically activated by Smad3. Expression of a dominant negative Smad2 significantly reduced the level of luciferase reporter activity induced by nodal treatment. Finally, we showed that nodal signaling rapidly leads to the phosphorylation of Smad2. These results provide the first direct biochemical evidence that nodal signaling is mediated by both activin/TGF-beta pathway Smads, Smad2 and Smad3. We also showed that the EGF/CFC proteins cripto and cryptic are required for nodal signaling, distinguishing this pathway from activin or TGF-beta signaling. We are now using this system to identify and isolate nodal target genes. We are screening microarrays representing 15,000 mouse genes expressed in the developing embryo to identify genes expressed in P19 cells that undergo changes in expression levels following nodal treatment.